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BreakpointsHow To Reduce Your Sales Charge On Class A Shares

There are a few different
ways to reduce the amount of initial sales charge paid when investing in Class
A shares of Davis Funds.

Please note that Davis
Funds must be made aware by either the shareholder or brokerage firm/financial
consultant if the shareholder wishes to take advantage of certain sales charge
reduction privileges. Failure to do so may result in not receiving a reduced initial
sales charge for a purchase(s).

Listed here are the ways
a shareholder could reduce the sales charge on their investments in Class A
shares:

Rights of Accumulation (ROA)

Rights of Accumulation (ROA) allow shareholders to link
any Davis Fund account1 in Class A, B and C shares in order to reach a
breakpoint for a Class A purchase. For example, a shareholder may have an IRA
account in New York Venture Fund Class A and an individual retail account in
the Opportunity Fund, Class B. The shareholder could mail in a written request
to link these two accounts together for Rights of Accumulation. When the
shareholder makes a purchase into the IRA (Class A shares), the system will
determine if the combined value of both accounts makes the purchase eligible
for a breakpoint.

Request must be in writing. The shareholder must request
this option in writing with a list of all the account numbers that the
shareholder would like to link and signed by all shareholders. This request may
come in the form of a letter, on the application form when the account(s) is/are
first being established, or on an Account Service Form.

How the system calculates account
values. The
total account values (including appreciation, capital gain reinvestments, and
dividend reinvestments) are used toward reaching a breakpoint. The current
value of all accounts linked is based on Public Offering Price (POP), not Net
Asset Value (NAV).

It
is important to note that since ROA is based on account value and not dollars
invested it is possible that in a down market accounts could depreciate. This
means that a shareholder that may have been eligible on a certain date for a
breakpoint may find that due to depreciation they may not be eligible on a
different date. Redemptions could also affect breakpoint reductions for
purposes of ROA.

Statement of
Intention (SOI)

A
Statement of Intention is a contract in which a shareholder states that they
intend to invest a specific dollar amount in one or more Class A share accounts
over a 13 month period (no extensions allowed).2

Some
important elements of Statement of Intention:

Request must come in writing. The shareholder must request
this option in writing with a list of all the account numbers that the
shareholder would like to link and signed by all shareholders. The
shareholder(s) should indicate what breakpoint they intend to meet within the
13 month period. This request may come in the form of a letter, or on the
Application Form when the account(s) is first being established, or on an
Account Service Form.

Assessing Breakpoints. Each purchase made under the
Letter of Intent receives the breakpoint and reduced sales charge at the time
of purchase. Remember, Money Market purchases DO NOT count.

Escrow. In the event that the
shareholder(s) is unable to complete the agreement, up to 5% of the LOI amount
is held in Escrow. This guards the Fund against a loss and will be used to
reimburse the Fund and the broker if the shareholder does not fulfill the
contract. The Escrowed shares are eligible for dividend and capital gains
distributions and are considered part of the overall account balance. Upon
fulfillment of the contract the Escrow status will be removed.

Reminder Letter.
A reminder letter is sent to the shareholder(s) in the 11th month of the SOI
period if the contract has not yet been fulfilled. If the SOI is not completed
within the 13 month period the shareholder will be charged for the difference in
sales charge. This can be paid directly by the shareholder or taken out of the
Escrowed shares.

90 Day Prior Purchase Privilege. Upon a shareholder(s) request,
the SOI privilege will extend back to any purchase made during the last 90 days
prior to the agreement being established. This means any purchases made within
90 days prior to the SOI going into effect will be counted toward satisfying
the contract.

Eligible Transactions. Only the amounts actually
invested in the account(s) count towards fulfilling a SOI. Appreciation and
reinvested dividends and capital gains are excluded from counting towards
satisfying an SOI. Redemptions are also taken into consideration. If the
shareholder(s) invests the amount necessary to fulfill the contract before the
13 month contract period has elapsed then the shareholder will be considered to
have fulfilled the contract.

Aggregating
Accounts

Shareholders
may aggregate (link) accounts for Rights of Accumulation or Statement of Intention privileges. Please see below for eligible account registrations that can be
aggregated:

A shareholder may aggregate
investments in Davis Funds made by a shareholder or their immediate family:
their spouse, or minor children (under the age of 21).

Trust accounts established by the
above individuals. However, if the
person(s) who established the trust is/are deceased, then the trust account may
only be aggregated with accounts of the primary beneficiary of the trust.

Solely controlled business
accounts.

Single participant retirement
plans.

In addition, organized groups can
also aggregate accounts as long as a group is organized for a purpose other
than buying mutual fund shares.

In
regards to employee benefit plans where shares may be bought through a trust or
fiduciary accounts and Individual Retirement Accounts (IRAs) of a single
employer, the purchases will be treated as single purchases.

Combining Rights of
Accumulation (ROA) with Statement of Intention (SOI)

A shareholder can use a SOI and ROA in conjunction with one another; the SOI
will take precedence over the ROA. Once the SOI has been satisfied, any new
purchases into any of the linked Class A share accounts will receive the
reduced sales charge. Again, Money Market Fund accounts do not count toward
either privilege nor do accounts invested in R or Y share classes.

* You
pay no front-end sales charge on purchases of $1 million or more, but if you
sell those shares (in any Davis Fund other than Davis Government Money Market
Fund) within the first year, a deferred sales charge of 0.50% may be deducted from the redemption proceeds.

1 Except Money Market accounts, unless the shares
were exchanged from another Davis Fund and the shares were previously subject
to a sales charge.

2 Shares purchased into the Davis Government Money Market Fund do not count
toward completing a Statement of Intention.